Appellate Court: FiberMark may argue for damages from DEP for delay in diverting discharge from landfill

HOLLAND TWP. — A lawsuit filed over a landfill once used by a now-defunct paper company has been partially reinstated and remanded back to the Hunterdon County Superior Court by the Appellate Division.

In 2008 FiberMark North America, Inc. sued the State Department of Environmental Protection because it couldn’t sell its property due to pollutants from a neighboring landfill.

FiberMark owned the Warren Glen specialty papermaking plant off of Route 519 as well as a plant on Cyphers Road off Route 627 in the Hughesville section of Holland Township. After the Warren Glen plant was closed in 2006 the company had to continue operating a wastewater treatment plant to clean pollutants that were leaching out of a neighboring landfill owned by the DEP, according to a suit filed on May 27, 2008.

The suit, filed by Joshua Denbeaux in Superior Court in Flemington, claimed the company had been financially harmed because the DEP failed to fulfill a promise to redirect the leachate from the property once owned by Crown Vantage.

According to the suit, in 2005 when Crown Vantage filed for bankruptcy that company reached an agreement with the DEP to abandon the landfill. Crown Vantage paid $1 million to remediate another landfill site and any money that was left over was to be put toward the Warren Glen landfill.

In 2006 FiberMark asked the DEP to stop the leachate from being discharged onto its property so it could finally shut the plant down.

On Jan. 8, 2007, FiberMark reached a tentative agreement with a buyer for the property but the $5 million deal was dependent upon the DEP diverting the leachate, according to the suit. The DEP said it would divert the runoff back into the landfill by Jan. 12, 2007, the suit said.

Two weeks later the DEP told FiberMark it had underestimated the quantity of leachate, so therefore could not divert it and would fine FiberMark if the company did not treat the runoff, according to the suit.

The sale fell through and FiberMark continued to pay taxes and maintain the property it couldn’t sell, the suit said. FiberMark also estimated that it was spending approximately $86,000 per month to operate the treatment lagoons according to the court opinion.

The federal district court later ordered the DEP to stop discharging leachate into the lagoons as quickly as possible and in April 2007, the DEP removed the pipe that had run from the landfill to the treatment lagoons, thus permanently cutting off the flow of leachate.

With the leachate issue resolved, negotiations resumed between FiberMark and IPPE, and in October 2007, they signed a contract for the sale of the mill but for significantly less money.

While the appellate judges agreed with much of the trial judge’s conclusions, they said FiberMark should have been permitted to argue to the jury that the DEP acted unreasonably and took an unreasonable length of time to resolve the leachate issue. The appellate judges also agreed that FiberMark should have been allowed to seek reimbursement for the costs it incurred in continuing in operation the treatment lagoons after the plant was closed.

The appellate judges however agreed with the lower court that FiberMark can’t hold the DEP accountable for the decrease in sale price of the property since they signed the option even though they had doubts that the diversion pipe would be completed as promised.

The appellate judges disagreed with the lower court ruling regarding the nuisance caused by the continued discharge of leachate. “There is authority for the proposition that a party who did not create or contribute to a condition may be liable under principles of nuisance if it had a duty to ‘prevent or abate’” the judges wrote.

They said FiberMark “was entitled to argue that the DEP, by accepting Crown’s $1 million, and agreeing to ‘remediate any environmental condition’ on Crown’s property, accepted the duty to abate the flow of leachate,” into the lagoons.